VA Linux Disappointed with First-Quarter Revenues
Nov 06, 2000, 20:03 (16 Talkback[s])
(Other stories by Carl King)
Re-Imagining Linux Platforms to Meet the Needs of Cloud Service Providers
By Carol King
VA Linux Systems' (NASDAQ:LNUX)
stock price fell nearly 40 percent Monday following an announcement
regarding disappointing first-quarter revenues.
Although official results will not be revealed till November 16,
the company stated that first-quarter revenue is expected to grow
by 10 percent from the previous fiscal quarter and 275 percent from
the same quarter last year.
Monday's numbers are pale in comparison to fiscal fourth-quarter
results, which showed record revenues of $50.7 million, an increase
of 547 percent compared to the same period of fiscal 1999 and an
increase of 46 percent compared to the prior fiscal quarter.
For the full fiscal year 2000, VA Linux revenues totaled $120.3
million, an increase of 579 percent over fiscal year 1999 revenues
of $17.7 million.
The provider of Linux and open-source solutions attributed the
revenue loss to lower-than-expected sales growth from new customers
in the dot-com sector as well as increased spending on higher
"Although repeat business with our existing customers remained
strong during the first fiscal quarter, the number of new customer
opportunities from venture-funded dot-coms declined faster than
anticipated, said Larry M. Augustin, CEO. "Going forward, we expect
to benefit from out strategy of pursuing a broader account base,
including business from large corporate and enterprise
"These customers require longer sales cycles, and we did not
receive a significant contribution to revenue from that sector in
the fiscal first quarter," he said.
Augustin expects the company's 2001 revenue to be about 2.25
times fiscal 2000 revenue. "This represents a reduction from the
previous guidance of 2.5 times fiscal 2000 revenue," he said. "The
company still anticipates becoming profitable, excluding non-cash
charges, no later than the end of 2001."
Today's high for the Linux stock was $18.75. The company has a
52-week high price of $320 and a 52-week low of $17.06.
Since its founding in 1993, VA Linux has grown from 15 employees
to more than 400.
- osOpinion: VA Linux for the Future: A New Generation of "Appliances"(Nov 02, 2000)
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- In Context: Follow the Money; Cathedral Investments in the Bazaar(Oct 20, 2000)
- LinuxPR: Open Source Development Network Launches Developer Services Program
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- LinuxPR: VA Linux Selects Quick Restore
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- Linux.com: It's Never About The Benjamins; Profit Push Destroying Linux Companies?(Oct 18, 2000)
- Upside: It's not easy being Red Hat(Oct 14, 2000)
- In Context: Linuxcare's Experience in Ramping Up a Bazaar Business Model(Oct 12, 2000)
- ZDNet: Atipa Team Takes Aim At VA Linux(Oct 09, 2000)
- LinuxPR: VA Linux Releases VACM 2.0 Cluster Management Software
(Oct 04, 2000)
- CNET News.com: VA Linux trying to make inroads into Japan(Sep 29, 2000)
- BW: VA Linux Systems Establishes Japanese Subsidiary With Sumitomo...(Sep 27, 2000)
- LinuxPR: VA Linux Systems To Provide Red Hat 7.0-Based Software On Servers
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- BW: VA Linux Systems Named One of Silicon Valley's Fastest Growing Technology Companies(Sep 23, 2000)
- LinuxPR: VA Linux Systems Grows Worldwide Server Market Share According to IDC
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- CommWeb: VA Linux Enters The NAS Market(Sep 12, 2000)
- Stockhouse.com: Linux: Red Hat and VA Linux Win Support, Corel Loses(Sep 11, 2000)